L5 - Enterprise information systems Flashcards
What are three perspectives on enterprise systems?
Three perspectives on developing enterprise systems have emerged: the hierarchical perspective, the functional perspective, and the process perspective
What is the hierarchical perspective and what are 2 problems?
Hierarchical perspective - applications are built to meet the needs of individuals at a given level in the organization.
The idea is that executives need strategic types of information they can use for decision-making, whereas middle managers and front line managers need tactical and operational information respectively
Limited interaction and consistency across systems
Problem of redundancy - different systems sometimes perform fairly similar functions
What is the functional (include problems) and the process perspective on IS?
Functional perspective - IS applications are developed to meet the needs of individuals in a functional area, e.g. marketing
The systems tend to serve the functional area well as they are customized to the needs of the department.
Problem of redundancy and inaccuracy of data, limits communication across functional areas
To solve problems of redundancy and lack of communication - process perspective focuses on integration.
Process perspective - IS applications are developed to support the task being done (or process) irrespective of the organizational level or functional area of the individual using the system.
What are 4 characteristics of enterprise systems?
Modular - an organisation can implement the ‘pieces’ it needs one at a time - limits efforts and costs and disruptions
As the modules are designed to be integrated with
one another, they function more efficiently together. - called application
Integration. Works because an event that occurs in one module automatically triggers events in one or more of the other modules.
Data are stored in one central database, by offering data integration, companies avoid the data redundancy and inaccuracy issues
What are 6 benefits of enterprise systems?
All modules easily communicate together efficiently
Centralized operations and decision making – even with different geographical locations
Reinforce the use of standard procedures across different geographical locations
Redundant data entry and duplicate data may be eliminated
Standards for numbering, naming, and coding enforced
Increased data quality through standardization
What are 5 disadvantages of enterprise systems?
Implementation requires an enormous effort
Requires redesigning business processes to achieve optimal effectiveness and efficiency in the integrated modules
Organizations are expected to conform to the approach used in the enterprise system (e.g., change organization structure, tasks)
A hefty price tag: additional costs for project management, user training, and IT support
Enterprise systems projects are risky
When is it appropriate for an organization to let the enterprise system drive business process redesign?
The organization is just starting out and processes do not yet exist
Operational business processes are not a source of competitive advantage
Current systems are in crisis and there is not enough time, resources, or knowledge in the firm to fix them
When is it inappropriate to let the enterprise system drive business process change?
Changing processes that are relied upon for strategic advantage
The features of available packages do not fit the needs of the business
There is a lack of top management support
What is an ERP system?
An Enterprise Resource Planning system (ERP) is a cross functional information system consisting of an integrated suite of software modules supporting the basic, internal business processes
ERP tools share a common process and data model, covering broad and deep operational end-to-end processes
What are typical modules in an ERP system?
Typical modules in ERP systems include financials, distribution services, human resources, and product life cycle management
Some ERP systems also include other enterprise systems applications such as Customer Relationship Management (CRM), Supply Chain Management (SCM)
Built on centralised database, offer system and business integration
The ERP system itself can reside on a centralized server or it can be distributed across modular hardware and software units that are interconnected.
What are 6 benefits of an ERP system?
Efficiency is achieved because ERP systems can reduce data redundancy (reduce direct costs of operation), improve communication (reduce indirect costs of operation through the streamlining of business processes), and in general allow complex systems to work together in an integrated fashion (also streamlining business operations and making sure tasks are performed in a standardized way).
ERP systems can provide more accurate information and more rapid responses to demands.
ERP systems are also adaptable since they can be configured to fit the organization’s needs - if too customised, they lose some integration and standardisation advantages
Based on modules, which enables prioritized acquisition
Continuously evolving to fit the needs of the market
Long-term relationships with the software vendor enabling partnerships instead of customer/supplier-perspective
What are 5 disadvantages of ERP systems?
Enormous amounts of work and high costs
Depending on customisation - take a long time
Changes the way business is done - there might be resistance - third order change
Require a strong champion, a person who believes enough in the implementation to see it through the many obstacles and years of efforts.
Long-term relationships - dependency
What is a supply chain and what are the 3 flows?
The supply chain extends the value chain of an organization
Product flow (movement of goods), information flow (orders and delivery status), and financial flow (credit terms, payment schedules, and consignment and title ownership arrangements)
Good SCM systems allow companies to offer just-in-time inventory
The key to SCM ’s success rests in the sharing of information both upstream and downstream
What are 6 benefits of supply chain management?
Integrating the supply chain by linking processes across organizations
Network technology links customers and suppliers through a single network
Costs and opportunities are optimized for all companies in the supply chain
Globalization have enabled businesses to integrate customers and suppliers from the supply chain from almost anywhere in the world => more varied supply and lower prices
Streamlining the supply processes thereby increasing efficiency and effectiveness
Supply chain can change through integration or outsourcing
What are 4 prerequisites/ challenges of supply chain management?
Integration of information between organizations requires
o Agreement on the type of information to share, the format, the technological standards, and the security they will use to ensure that only authorized partners can access the information
o Trust, so the partners can solve issues that may arise.
Synchronized planning › A joint design of planning, forecasting, and replenishment
Workflow coordination › Coordination, integration and automation of key business processes
Integrated supply chains are global in nature – but the delivery costs may rise…
What is a CRM system?
Which activities are supported by a CRM system?
An organisation-wide strategy for managing an organisation’s multiple interactions with customers
CRM involves a set of activities and technologies (the CRM system) meant to help understand the needs of current and potential customers
CRM manages and supports activities performed to obtain, enhance relationships with, and retain customers.
› Includes the processes: sales, support, and service
› Contains information about customers, sales, marketing effectiveness, responsiveness, and market trends
What are three main goals of CRM?
(1) Helps organisations manage multiple channels of interaction with customers in ways that the customers prefer
(2) Provide an integrated picture of the customer across the various customer-facing parts of the organisation
(3) Enable the analysis of customer-related info. Gathered through interactions and externally
What are three components of CRM?
Operational components - help an organisation improve day-to-day interactions with customers, e.g. sales or repairs -> first three steps of life-cycle
Collaborative components - help the organisation interact and collaborate with their customers. E.g. email, interactive chat, Interactive Voice Response (IVR) systems, and Voice over IP (VoIP), which allows a customer to talk to a “live” customer service representative while online.
Analytical component - technologies and processes organisations can use to analyse customer data
What are 6 benefits of CRM?
Expected to provide greater customer satisfaction - customers can receive personalised services and products, faster response, more streamlined interactions -> will lead to customer retention
Can help an organization maximize its profits by reducing the costs for acquiring a customer and servicing customers and increasing overall revenues.
Revenues can increase because of customer loyalty, but also because of what is called cross-selling, or the selling of products to customers based on other products they acquired
More efficient sales transactions
More efficient call centres
More effective sales and marketing efforts
What are 3 disadvantages of CRM?
In order to be successful in implementing a CRM system, organizations must ensure that all customer-facing employees are customer-minded.
Complicated technological issues
Focus on the existing transactional and behavioural data collected by the organization based on the prior and current interactions. Trends can be used to predict some purchases, but not all -> CMI
What is IT governance?
A management tool for aligning business and technology initiatives throughout a company
Makes sure that the decisions about business processes and systems are made in accordance with the overall strategy of the organization
Often two competing goals when considering resource-distribution: stability versus innovativeness
What is the “IT engagement model”?
IT governance itself is not enough
Mechanisms must be designed to ensure governance at strategic level, business unit level and project level – as well as between business and IT
The “IT engagement model” sees the organization as being divided into three management levels, and links the business side to the IT side: in all, six stakeholder groups to be “engaged”
Each of the six groups has their own objectives – but should follow the overall strategy
All six stakeholder groups should be engaged in order to assure alignment
Linking mechanisms – link project management with company-wide IT governance, that is they ensure that project teams remain coordinated and aligned with higher-level strategies throughout their lifecycle
What are the 3 kinds of linking mechanisms?
Business linkage - works vertically, up and down the organisation, linking projects to company level and business level strategies. Mechanisms connect projects to company and business unit strategies (process owners, strategy boards, reward systems)
Alignment linkage – mechanisms connect IT with the rest of the business, works horizontally
(Business-IT integrator)
Architecture linkage – mechanisms connect projects to architecture transformation efforts. Works vertically, linking projects to company and business architecture.
(enterprise architecture office, enterprise architects on projects, review projects for compliance)
What are 7 principles for good engagement?
Build on a foundation of good IT governance and project management
Make strategic objectives clear, specific, and actionable
Motivate to meet company goals
Define enforcement authority
Emphasize early intervention and prevention
Maintain transparent, regular, two-way communication
Involve the right people
Enterprise systems …
Enable information flow within and between processes across an organization.
Ensure integration across functions such as accounting, production, customer management, and supplier management.
What is the customer service life cycle?
Framework helpful to understand what CRM can be used for
Completion of one round of the cycle often leads to another round
Engage: creating customer awareness of product, goal: generate leads and convert leads into customers e.g. email marketing
Transact: all activities associated with the purchase process. Goal: effeciently and effectively complete the purchase process e.g. order management, payment process and options
Fulfill: delivery of product or service e.g. order tracking
Service: supporting customer during ownership of product or service e.g. call center automation
IT governance…
Defines expectations, fx through strategy, enterprise architecture, IT principles, investment priorities
Assign authority through mechanisms, fx general priority process for projects, CIO in the business strategy team, chargeback processes…
Ensures performance through follow-up and enforcement
Align behavior with business goals through authority and supervision
› Authority: assigning decision rights
› Supervision: to evaluate performance
Focus is that decision rights should facilitate decision-making
